It might be possible to improve your situation using tips from Attorney Nicholas Hicks of New York.

Declaring bankruptcy is an extreme measure that if used correctly, can save you money, time, and financial distress. However declaring bankruptcy can also be time consuming, expensive, and can negatively impact your credit rating. A bad credit rating can negatively affect your ability to make credit purchases, obtain employment and housing, just to name a few. Therefore, before you declare bankruptcy, Attorney Nicholas Hicks of New York suggests asking yourself five questions to determine if filing for bankruptcy is the best solution for you.

Can you find the money to pay bills another way?

Attorney Nicholas Hicks suggests looking into obtaining additional employment if doing so does not negatively impact your health, or compromise you family relationships. Working a second or third job may be a temporary solution to help you pay down debt more quickly. Another possibility is to reevaluate your current job position. Research the job market to make sure you are not being underpaid. It doesn’t hurt to apply for better job opportunities with higher pay.

Have you been following a budget?

Many people don’t follow a budget and do not know where their money goes. Without budgeting, it is impossible to determine where you can make changes in your spending. There are many budgeting programs and apps available today that make setting up a budget easy.

Attorney Nicholas Hicks of New York also suggests that you consider other lifestyle changes such as downsizing your living space or getting a roommate. Cutting down on housing cost can save you big money in the short and long run. If you eat out often, start cooking at home to save money on food. Budgeting allows you to clearly see where adjustments should be made.

Is your situation temporary?

Realistically consider if your financial problems are temporary or long term. If you have historically paid your bills on time, Attorney Nicholas Hicks recommends waiting to see how much you can improve your situation quickly.

Can you negotiate with lenders?

Many lenders will lower interest rates and or even reduce the amount owed if you tell them that you are considering filing for bankruptcy. Credit card companies are more likely to drop rates and/or reduce the outstanding debt because in most cases they lose even more money if you file bankruptcy. Attorney Nicholas Hicks of New York notes that in most cases, Student loans cannot be reduced or eliminated in bankruptcy. However, lenders can suspend payment requirements, change your repayment schedule or otherwise adjust payments to better fit your current income situation.

Will bankruptcy actually benefit you?

Lastly, determine if bankruptcy will actually benefit you. There are various types of bankruptcies each having their respective benefits and negative consequences. It is best to consult with an attorney to determine first, if bankruptcy is the best option and if so, which chapter of bankruptcy best fits your needs.

About Nicholas Hicks:

Starting from an early age, Nicholas Hicks was rescued from NYC foster care at the age of 5 years old. Nicholas Hicks attended both public and private school where he eventually graduated from ECC, UB & UB Law School.